Thinking About Buying a Home?
Thinking About Buying a Home?
For many people achieving homeownership is an important goal. Not only does it instill a sense of pride, but it has financial benefits as
well. Homeowners can deduct the interest they pay on their mortgage (long term loan), as well as their property taxes from their income
taxes. It’s also a great way to build personal assets to ensure you maximize the value of your hard earned money. However, purchasing a
home is also a big responsibility and should be taken seriously. In many cases it’s a good idea to meet with an experienced housing
counselor who can guide you through the home buying process, review your credit, help you access different down payment programs and
find the best mortgage product for your situation.
Many community-based counselors
provide this service free of charge.
Applying for a Mortgage
Most people borrow money to buy a home. This money comes in the form of a long-term loan, usually 15 -30 years, which is called a mortgage.
To qualify for a mortgage, banks will want to review your
credit history, monthly income, the savings you will
use to pay for the downpayment and closing costs (bank origination fee, attorney's fee, taxes, escrow, and charges for obtaining title
insurance, and home buying survey). In the past, most banks wanted borrowers to have at least 20% of the cost of the home saved, but
today there are many more types of mortgages available. In some cases, banks offer mortgages that cover almost 100% of the cost of the home
and even have special programs for people who have less than perfect credit.
Saving for a Down Payment
For many people, the lack of a down payment is the greatest hurdle to homeownership. This is especially true for first-time home buyers and
people who earn a lower income. Today, however, lenders offer numerous special loan programs that require less money down. Some target
first-time home buyers while others primarily help people who don't make much money. Additionally, the government and local nonprofits
often provide grant funds to help people achieve homeownership. Examples of two such resources available in Memphis include a
down payment assistance program offered by the Tennessee Housing Development Authority (THDA) as well as
a matched savings plan administered by the RISE Foundation.
Watch Out for Predatory Lenders!
While there are many reputable banks that can provide you with an affordable mortgage, watch out for mortgage lenders or brokers that seem
to be offering a deal that is too good to be true. These people are often time predatory lenders, who get you to take loans with high
interest rates and hidden fees. Many times these people will come door to door or try to disguise their bad loans by associating themselves
with a legitimate name like a government-sponsored down payment assistance program. They may even tell you that due to your credit history
or income that another bank will not provide you with better financing. Don’t be fooled; know your options! Never rush to sign any
papers before reading and understanding the loan terms completely, or having a trusted professional like a community-based counselor read
through the documents with you.
Finding an Affordable Home
There are several nonprofit developers that build homes for people earning a lower income. Exact income requirements are based on your
family size and are adjusted each year. For example, a family of four earning less than $45,850 and a family of six
earning less than $53,150 are eligible fo a new home.
For an up-to-date listing of homes currently on the market contact the Community Development Council at
info@memphiscommunitydevelopment.com or call
(901) 725-0460.
You can also contact the individual community developers directly:
Cooper Young Development Corporation
2298 Young Memphis, TN 38104
Tel: (901) 272-1459
Fax: (901) 272-1455
Email: CYDC@bellsouth.net
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Frayser CDC
3394 Overton Crossing
Memphis, TN 38127
Tel: (901) 354-7178
Fax: (901) 354-7157
Email: fraysercorp@bellsouth.net
http://www.fraysercdc.org
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LeMoyne Owen College CDC
802 Walker Avenue, Suite 5
Memphis, TN 38126
Tel:(901) 435-1654
Fax:(901) 942-6448
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Neighborhood Housing Opportunities
1548 Poplar Ave.
Memphis, TN 38104
Tel: (901) 729-2934
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Orange Mound CDC
2395 Park Avenue
Memphis, TN 38114
Tel: (901) 327-4205
Fax: (901) 324-6245
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United Housing, Inc
51 N. Cooper
Memphis, TN 38104
Tel: (901) 272-1122
Fax: (901) 272-1181
Email: info@uhnic.org
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VECA
1680 Jackson Avenue
Memphis, TN 38107
Tel:(901) 276-1782
Fax: (901) 276-1784
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The Works
1471 Genesis Circle
Memphis, TN 38106
Tel: (901) 946-9675
Fax: (901) 946-6749
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It’s important to remember that these organizations can only provide information on the homes they build so make sure you shop around
and know all your options!
